The total value of all cryptocurrencies has dropped 11 percent since Saturday, declining from a high of nearly $180 billion to under $160 billion today.
But that might not be cause for alarm, according to one bullish analyst.
In fact, Ronnie Moas, the founder of Standpoint Research (known for his prediction that the cryptocurrency asset class will one day be valued in the trillions), contends that the price break is rather the work of larger traders who want to build up even bigger positions in cryptocurrency.
“When people panic and start selling, they are going to come in quietly and start buying again. So it’s buying 50,000 then dumping 20,000, for example,” he said, adding:
Such statements echo commentary from yesterday, in which market analysts, most of whom are long-term bullish on the technology’s prospects, put forth the claim the current market conditions might fit the definition of a “bear trap” meant to open up buying opportunities.
Even if that’s not the case, Moas said it’s important to remember that just six weeks ago bitcoin was trading at $1,800 – and it’s at $4,400 now, meaning the price has risen over 140 percent in the last month and a half.
“It’s a healthy correction. You need to keep this 11% correction in perspective,” he said.
Overall, Moas sees the decline as a way to encourage new wave of buyers who have been sitting on the sidelines to act. “Anybody who didn’t want to chase bitcoin at $4,800 is now getting their opportunity to step in and buy right now,” he said.
But, Moas added one major caveat to his bullish sentiment. Because market prices are moving so far so fast, market dislocations are causing execution risks for investors.
Moas explained that he went to a major exchange to buy more bitcoin yesterday. He put in an order that got filled at $4,633. Immediately after he submitted the order, he went to another exchange to check the price, and saw that it was trading at under $4,500.
When he contacted the exchange, they told him that they would get back to him in a few days with an answer.
“You really need to know what you are doing here,” he concluded.
News Source : CoinDesk